The Next Videogame Crash Coming Soon

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Thu, 06/23/2011 - 3:00pm — Matt Barton

Everybody who's been gaming or awhile is well aware of the Videogame Crash of 1983, a period that saw the collapse of the American console market and a strange period when many people thought the videogame was dead. The causes are numerous and hotly contested, but it's likely just an unexciting story of a bubble that popped. One strain of the story I've always found interesting as it is improbable, is that two games are primarily responsible for the crash: Howard Scott Warshaw's E.T. and Tod Frye's Pac-Man, both for the 2600. In both cases, we're talking about massively hyped games that sold tremendously well, but then got returned to stores in droves. My thought for today is whether something like this could happen again--could a rapid-fire succession of massively disappointing games topple the industry like it did in the 80s?

We've recently seen five games that by all rights "should" have been great--expectations were high, fanboys Games Industry Not So Muchnumerous, and, for the most part, very talented people were in control. However, in each case, the major critics either dismissed them as mediocre or blasted them as if they were almost personally offended by their perceived lack of quality:

Even Nintendo seems to be having problems. Despite the waves of hype the 3DS is currently receiving over the re-release (yawn) of Ocarina of Time, I still see the whole thing as another Virtual Boy with a much better marketing campaign. I see an upcoming backlash, though, as more purchasers find that they aren't getting full refunds when they try to return the devices that give them headaches. That's the kind of episode and bad publicity that can make anyone think twice about buying a game. As for Nintendo's new console, it sure looks like that "U" stands for "Useless." Sony, of course, is unlikely to ever recover from the PSN nightmare, and Microsoft doesn't seem far behind. Even if the new console is great, who can justify it in this economy?

Now, in each case, of course, there will be people who claim these reviews are wrong and everything is hunky dory. That's to be expected. Maybe IGN and Gamespot are just running a smear campaign. Maybe those people with the headaches are just freaks. In any case, though, there seems to be a growing sentiment that the industry just can't live up to gamers' (and critics') expectations.

My interviews with people like Jon Hare, Jeff Williams, and Scott Miller offer many reasons for this. The biggest is the tremendously escalating costs of 3D game design. That entails bringing a major publisher on board, and once they get there, they start calling the shouts--or rather, their accounting and marketing people start calling the shots. Suddenly, decisions are being made based on "sure fire hits" vs. anything risky that might challenge the status quo. End result: sequels, licensed titles, me-too products.

The last hope seems to be casual markets, mobile gaming, and so on, but there's a big problem there. Much like the bargain shoppers of the 80s who were all too happy to pick up five games for $5 from the bargain barrels at Toys R Us, this market is accustomed to buying games for 99 cents. It's hard to imagine the next Call of Duty or Bioware RPG epic costing 99 cents, isn't it?

I'm sensing that we're about to see the bubble burst in the videogames industry, at least the part concerned with triple-A games and big budgets. As before, things will undoubtedly recover after a painful readjustment and rebuilding process, but when anything remotely innovative is coming from tiny indie teams and being sold for 99 cents, it's time to start unloading stock.

Comments

EA is buying PopCap. That oughta tell you something about which way the wind is blowing.

I think we're already in the midst of it, honestly, but it's tough to see the forest for the trees from here. I don't doubt that these big budget games will probably be with us for a long time, but what we think of as the status quo that has existed for a couple of decades in terms of the game publishing landscape (even if the actual participants have changed), I think we're in the middle of what could be an extinction-level event. I think most of the people in the industry sense that, too. They just don't know what it's going to look like 5 years from now. But think back five years ago - well, okay, six - and we had EA *BRAGGING* about how the era of small, indie companies was over. According to a NY Times article (quoted at Grand Text Auto):

The high cost of game development means that only the largest companies can afford to be in the business. While low-budget movies can occasionally become hits, “it is now impossible to ‘Blair Witch’ this business,” said Jeff Brown, vice president for corporate communications at Electronic Arts, referring to the successful independent film.

Yeah, how did that turn out for 'em? Now they are scrambling to get a piece of that `Blair Witch' action...

Anyone who says there's going to be another crash, a la the crash of '84 (and notice I said '84, not '83, as I described back in 2008: http://www.armchairarcade.com/neo/node/1947), is wrong. There's just no other way to put it. We may as well say that the music industry will crash because of some high profile failures or the movie industry will crash because Green Lantern and other big budget films like it didn't make enough money (or that viewers are "rebelling" against 3D films). Any sufficiently mature industry with big money players will sustain itself through every up and down. The last crash - and the last true crash the industry will ever see - happened in 1984 for a reason--too many companies with shallow pockets glutting the market with product. Videogames have long since moved to "mature industry" status and a market that will correct itself.

Now, this doesn't mean that the marketplace won't change--we've seen a dramatic shift in the aforementioned music industry in the face of new technology. Videogames are in such a shift, where companies who do business exclusively the old way simply won't survive. They certainly won't be taking the whole industry with them, though. So much is different, from the grudging mainstream acceptance of videogames to ever lower barriers of entry for creative product to find its way to market, to an almost unlimited number of consumers to target. No, now is the best time to be a gamer and the best time for the industry, even though we're in a bit of a downturn along with nearly every other industry on the planet.

In reading Rampant Coyote's comment just now, I can see he's saying pretty much what I am.

Bound for there to be some big crashing around given that, like most things, a prolonged period of only thinking out things one quarter at a time and not a whit towards not only history as it stands and as currently in the making----but the future proper.

The tech continues to shift in directions more favorable to Indies and just outright smaller outfits. The global dynamics are shifting in terms of brain drains and the like aside from economics that may well result in "new" areas, with untrodden perspectives, like India to supplement the usual suspects for countries of origin.

Things are primed to become rather more interesting in this still very young niche of human culture and endeavor, but there remains much still to be done alongside tricky bits to solve. Also, like many pursuits, it is a bit of a crapshoot in terms of external factors being perfectly capable of a grand derail that could lead us to some "lost years".

We've yet to really "utterly dwarf' the big ideas of the 80's and 90's in my estimation----with the tech finally reaching a place where that is no longer a case of reach exceeding grasp. How much more interesting will it be then, when the ideas of the new milennium reach the forefront...

I think the possibility of a crash is a good one, but not a total crash. Obviously not all sectors will be evenly affected (and they weren't in the 80s either). Indeed, arguably the crash was a good thing for Nintendo, since they didn't have to compete with a strong rival platforms (ColecoVision, Intellivision, etc.) and at least some computer game publishers. I'm mostly talking here about console makers (Nintendo, Sony, Microsoft) and the high-end (not budget, indie, or casuals) targeted to those platforms. The PC gaming market has been all but dead compared to those for years anyway.

I think the era of the $60 game is coming to an end. Gamers won't buy them because they've been burned too many times and have what will become increasingly unrealistic expectations. Publishers will continue to try to combat the decline by insisting that developers "play it safe" and target the broadest possible markets, trying to make games that will appeal broadly by focusing on "proven" licenses and "proven" engines. Nothing but me-too, generic stuff in the gameplay department. They'll also try to compensate with more of the stuff gamers hate, such as fee-based DLC, "prestige items" (want the best gun, you gotta pay $20). Then there's the free to play model, which seems to piss everybody off, or my favorite, the downloadable game that the license makes you clear you don't own and can't re-sell.

Eventually people are going to say, "Enough is enough," especially when the economy has cut their disposable income. This will drive more people to used games, bargain deals, or downright piracy. None of this will be good for the industry.

Alpha Protocol ... haha that game is major fail. Too bad but Obsidian spoiled it on this promising title.

It appears to me that recently the 'official' gaming press is just becoming more and more elitist and arrogant. Introduce a game like DNF and they will denounce it as juvenile! Uh oh, you are soo grown up, game reviewers! If a FPS isn't up to par with CoD it's not worth giving it a higher score than 6, right?

Thanks god I give a damn about what the gaming press is saying. They decide games like Mass Effect or Dragon Age as the next-gen yardstick. I found these games rather dull.

I think Duke Nukem Forever is a really bad example to give, sascha. It is a sub-par, juvenile game that deserves the backlash it's getting. I can easily make the argument that even if Duke Nukem Forever was simply an average game, the response would have been extremely enthusiastic. The ironic thing is that even though the game is dreadful, it still sold in obscene numbers. People were clearly desperate to want to like the game. I think those two factors leaves the window open for a sequel that's actually competently executed. I thunk the series has that one last shot.

I believe gaming is BETTER than it ever has been right now, and we are headed in the complete opposite direction from a crash.

Sure, we can talk up the big IPs, talk about disappointing sequels, and scratch our heads at Nintendo's latest handheld, but the true is that gaming is evolving. We had smaller games, we had big budget games, and I do believe (as others have said) that the market is simply shifting.

There are plenty of cellphones out there, but just look at the iPhone for example.

X-Box Live has 25 million users after X-Box and the X-Box 360
Apple launched Game Center - what? late last year? and has 50 million members.

I would say that a larger percentage of X-Box gamers use their online gaming service compared to Apple. So I think that there are more Apple gamers not contained in the number for Game Center vs. X-box gamers not included in the number for X-Box Live.

Life is busier than it ever has been. I think it is time for the market to reduce (but not eliminate) the big budget games and focus more on twitch gaming (and ongoing games such as Smurf Village and Words with Friends). I didn't like this idea a few years ago, but now I welcome a gaming market that divides between hardcore gaming and casual, cellphone gaming.

Perhaps better yet, Chris, it's time to stop differentiating between casual and hardcore, something many of us I don't think were ever really comfortable with in the first place. It's terminology for convenience, not reality. If you game, you're a gamer, and most people game, so most people are gamers. There is no definitive line between someone who plays Angry Birds regularly on a smartphone and someone who plays COD: Black Ops regularly on an Xbox 360. They're both enthusiastic gamers. I think dropping the delineation will help to continue the positive evolution of our industry.

Funny stuff, something that was common in several of the Ultima games from the 80's for instance, now being a "bonus" only if you pre-order. Of course it didn't stop me from pre-ordering the Xbox 360 version on Amazon, but still...

I think dropping the delineation will help to continue the positive evolution of our industry.

Agreed. Would be nice to have a simple distinction of gaming by the genre of the game - just like movies and music. America is slowly - SLOWLY - moving toward Japan in regard to widespread videogaming. Will they ever reach them? The cliche phrase would be "only time will tell," but I don't think our culture will embrace it until those in their 30s and 40s have hit their 70s.